A staggering number of London restaurants fear closure in the next year

 
Alys Key
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London: Everyday Life
Rising rents are unmanageable for many restaurateurs (Source: Getty)

A huge majority of London hospitality businesses anticipate that they could close or relocate sites, a new study has revealed.

Some 90 per cent of restaurateurs consider current costs to be "unmanageable", property specialist Cedar Dean Group (CDG) found in a survey of 600 businesses.

The revelation follows this year's increase in 2018, which have pushed 84 per cent of restaurant operators to consider closing down sites or leaving central London.

Hospitality businesses have already warned of a toxic cocktail of the impact of rent rises, business rates, and other costs such as the living wage.

The CDG study showed that restaurants are spending an average of 21 per cent of turnover on rent, compared to 12 per cent five years ago.

Major voices from the capital's restaurant scene called for rents to be made fairer, saying that upward-only rent reviews are unfair.

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“A number of restaurants are in serious trouble at the moment, predominately related to the rents and not assisted by legislation," said Roger Payne, chief executive of Shaka Zulu operator The Camden Dining Group.

"Historically, the most successful rents have been under 12 per cent of turnover and as restaurants have needed to expand, landlords have taken advantage and rents have crept up because of demand.”

Under the Landlord & Tenant Act 1954, tenants have the right to have a renewable lease on the same terms as their original lease.

But more than a quarter of operators said their leases now don't fall under the Act.

Leonid Shutov, Bob Bob Ricard, said: “Leases within the act shouldn’t be optional or at the discretion of the landlord. The average leaseholder today has no protection whatsoever; they can’t rely on the Act. If landlords are unwilling to offer a lease within the Act, they have no choice."

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